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TMI Blog2017 (5) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... he penalty proceedings initiated against the assessee under section 271(1)(c) of the Income Tax Act, 1961. 3. First we take up quantum appeal i.e ITA No.2706/Ahd/2014 . 4. In the first ground of appeal, the assessee has challenged reopening of the assessment by issuance of notice under section 143(2) of the income Tax Act, 1961. 5. Brief facts of the case are that the assessee had obtained permanent account number in the year 1989, but she never filed her return of income. Statement of her husband Shri Gautam R. Desai was recorded by the DDIT (Invt.), Valsad on 13.2.2009. In his statement he has disclosed investment of Rs. 2 lakhs in mutual fund in F.Y.2004-05 in the name of Smt.Kashmira G. Desai. Similarly, he disclosed an investment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 005- 06. Place: Surat. Date: 20.03.2012 (Arunkumar K.G.) Income Tax Officer, Ward-2, Valsad. 6. The ld.counsel for the assessee while taking us through the reason contended that husband of the assessee has disclosed his investment though in the name of the assessee. Therefore, assessment for the Asstt.Year 2005-06 ought to be reopened in the name of Gautam R. Desai and not the assessee. In other words, the stand of the assessee was that no material exhibiting escapement of income in the hands of the assessee was obtained by the AO to form a belief that income has escaped assessment in her hand. In his second fold of submissions, he contended that in the assessment order, the AO has not made addition on account of investment in m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has calculated the closing capital balance as on 31.3.2004. She was aware that six years have been expired from assessment year 2004-05. The AO will not be in a position to reopen that assessment. Closing balance shown in the earlier year would be opening balance in this year and this opening balance will explain the investment in the assets. The AO confronted the assessee to prove source of capital balance available to her in the opening account. She failed to give explanation and due to this reason, he made addition of unexplained opening balance. This unexplained opening balance can easily take care of the investment made by the assessee during this year and for this reason, there was no need to make double addition. Similarly, as far ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activity in itself is doubtful. However, there may be some saving in the hands of the assessee, because being a woman, she might have received gifts on different occasions, either from her parents or from her in-laws. Therefore, the AO ought to have not doubted total capital balance. He should have given a credit of her past savings. Considering these aspects, we are of the view that at the most a sum of Rs. 1,47,391/- could be treated as unexplained opening capital balance and a benefit of Rs. 2,00,000/- representing small savings in the past out of non-taxable income could be estimated. The ground raised by the assessee is partly allowed. 9. In the next appeal, grievance of the assessee is that the ld.CIT(A) has erred in confirming penal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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